Whistleblower tips to SEC rise 8%

BY KEN TYSIAC

Tips to the SEC by whistleblowers rose 8% in fiscal year 2013 over the previous fiscal year, according to an SEC report to Congress.

The SEC received 3,238 tips in FY 2013, compared with 3,001 tips in FY 2012, the first full year of the program. The SEC’s fiscal year begins Oct. 1.

Among complaints attributed to a category the SEC is tracking, misconduct related to corporate disclosures and financials was most frequently alleged by whistleblowers, with 557 reports, up slightly from 547 the previous year.

Whistleblower reports alleging offering fraud rose the most, to 553 in FY 2013 from 465 in FY 2012. Allegations by whistleblowers of manipulation also were frequent, jumping to 525 in FY 2013 from 457 in FY 2012.

The largest number of complaints—764 in FY 2013—were not attributed to a specific category.

Mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, P.L. 111-203, the whistleblower program awarded tipsters a total of $14.8 million in FY 2013. More than $14 million of that total was awarded to one whistleblower whose information led to a substantial recovery of investor funds.

Whistleblowers who voluntarily report original information that leads to a successful enforcement action resulting in monetary sanctions of more than $1 million can receive awards of 10% to 30% of the money collected.

Ken Tysiac ( ktysiac@aicpa.org ) is a JofA senior editor.

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